I uninstalled IE7 Beta 2, rebooted my system and then installed RC1. I then rebooted and after logging in was prompted by a warning message saying ieplore.exe could not run do to normaliz.dll not being found on my system and Windows failed to boot any further.
I was now dreading what I had done until a quick Google search (lucky I have multiple PC's) showed this isn't an isolated problem and numerous other users have encountered the same issue.
Lucky the fix isn't that hard - since you can access task manager after this error occurs you can run cmd.exe, locate normaliz.dll (or download a copy) and copy it to c:\windows\system32 and reboot.
A few more details are in the links below
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